Statement of Values

A. O. Smith will achieve profitable growth

Profitable growth is essential for A. O. Smith’s future. To achieve profitable growth, we must provide:

• New and high-quality products for our customers;
• Greater opportunity for individual advancement and improved job security;
• Growth in investment value for our stockholders.

Not only will we seek an above-average return on stockholders’ investment, we will grow in a planned way so that:

• Our business units will have individualized growth rates that complement each other and produce a company that grows faster than the U. S. economy;
• The capital requirements of growth will be supported by funds generated by our above-average return on investment and by external sources, such as borrowing and equity.

A. O. Smith will emphasize innovation

Innovation is a primary source of profitable growth. Therefore, we will:

• Achieve market leadership in all major product lines through innovation and continuous improvement that increases the value of our products and services to our customers;
• Seek innovative ways to improve our effectiveness as an organization and the productivity of our facilities;
• Foster development of attitudes and skills in our people that encourages involvement and creativity;
• Achieve management excellence to produce the best results and position our company for future growth;
• Focus on achieving profitable growth with a disciplined approach to mitigating risk.

A. O. Smith will preserve its good name

In all dealings with people and organizations, we will act with uncompromising integrity. We will:

• Be fair and truthful in all claims and advertising;
• Deal fairly with customers, suppliers, competitors, government and regulatory agencies, and employees;
• Strictly adhere to all laws and seek only honorable goals while rejecting unethical practices;
• Achieve high standards of quality in all aspects of the business;
• Instill these values in succeeding generations of employees.

A. O. Smith will be a good place to work

In operating our company, we will attract imaginative and competent people. We will emphasize teamwork and welcome diversity in seeking our objectives. We will:

• Create a climate where respect for the individual is fundamental;
• Encourage the freedom and personal growth that comes with self-discipline and enthusiasm for work;
• Treat each other fairly and without discrimination;
• Pay individuals equitably according to their contributions;
• Provide safe equipment, proper materials, and training and always insist on safe practices.

A. O. Smith will be a good citizen

To serve the public and the communities in which we do business, we will:

• Strive for growth that contributes to the economic well-being of the communities in which we are located;
• Provide financial support for and encourage our people to involve themselves in worthwhile civic activities;
• Insist that our plants and operations comply with environmental standards;
• Encourage, in every appropriate way, the protection and preservation of the free enterprise system so necessary for the attainment of these objectives.